Thirty-six employees at United Way Worldwide’s Alexandria, Va. headquarters have until the end of today to accept offers in new positions. Two dozen of their colleagues were left without positions in a restructuring announced Tuesday aimed at expanding growth in other global markets.
The $5-billion-a-year charity announced it would eliminate 60 positions, replacing them with 58 posts, in a realignment to expand efforts in regional offices around the world.
The 60 eliminated positions tended to be more high-level posts because the organization aimed to create larger teams and fewer siloed functions, according to Brian Gallagher, president and CEO of United Way Worldwide. “When you do that — if you do it genuinely — it means that it’s the leaders that come out,” he said. Of the 60 spots, 17 are vice presidents, 19 directors and 19 managers, as well as five senior associates/assistants.
“I’ve only been through a few of these in my career, and this has been the most difficult. For me, this wasn’t a cost-driven exercise. It was not a talent-driven exercise. It was a complete realignment because we created a brand new organization,” Gallagher said during a telephone interview with The NonProfit Times.
“We flattened the organization. As challenging as that was, today’s organizational design is more about team than function. We took a big layer out and made larger teams,” said Gallagher. While he doesn’t consider United Way a corporation, he said the best way to think about the move is that the charity downsized corporate functions — like brand, finance and marketing — while increasing geographic functions, in working with local United Ways. Regional offices around the world will be expanded from one director with scant support staff, to as many as seven staff (11 in Asia), each focused on training, fundraising and other areas.
Gallagher doesn’t see many affiliate-based nonprofits in the United States doing the same thing. “If you’re a large, long-standing, U.S.-based nonprofit, your worldwide relationship is probably a confederation. It’s very unwieldy, very difficult to manage. We decided to put together a true worldwide organization,” he said.
“We’re a very decentralized organization,” he said, with fewer than 11,000 employees around the world but less than 250 at United Way Worldwide headquarters in Alexandria, Va.
It was just time for United Way to set up a distinct U.S. operation, and also to set up a regional structure, putting teams in regional offices around the world, according to Gallagher. “It was just a matter of timing to make the change,” he said.
Gallagher has been president and CEO of United Way of America since 2002, staying focused on the United States for a long time. It became clear that it would make sense to put United Way America and United Way International back together again, he said, which had been one organization from 1974 to 1992. The two merged again in 2009, and Gallagher said he’s been doing the job of United Way Worldwide and United Way America president ever since.
Stacey Stewart was announced in September as the new president of United Way USA, after serving as executive vice president, community impact leadership and learning, at United Way Worldwide. Stewart’s appointment and the realignment were “parallel tracks,” Gallagher said, in trying to determine what the organization’s design should look like.
“It was a little like a corporate merger, you have to get teams working together in a way that was never seamless but made sense for me as CEO to give leadership inside and outside the U.S. We needed to make sure local United Ways around the U.S. were comfortable with the merger and with what we were doing,” said Gallagher.
United Way generates $1.2 billion outside the United States, with partnerships and affiliates in all parts of the world, and not all of them recent outposts. Gallagher cited the United Way’s Community Chest in Cape Town, South Africa, which was established in 1927.
Global corporations have been growing faster outside the United States for more than a decade, and that continues to be the case, said Gallagher. United Way is looking at it the same way – expanding its market.
All charitable giving is slow right now. United Way’s biggest footprint is in Asia, where last year it grew 6 percent, and expects to 6 to 8 percent in the future. “For us, that’s almost $700 million a year,” Gallagher said.
Gallagher expects charitable giving to grow as it historically has in the U.S., tracking with GDP and personal income, whereas places like China, Brazil and Mexico are developing a philanthropic market. “Even in Western Europe, governments are struggling with how to pay for the social promises they made,” he said.
“People see selves as increasingly as world citizens. Companies in places like China and Brazil are always looking for Corporate Social Responsibility opportunities,” Gallagher said.
“If we want to be what we want to be — a worldwide organization — we have to think about Europe, Asia, etc.,” Gallagher said.
“We need more civil society organizations to scale up to be at the table with business and government, to make the three legs of the stool in the global community,” Gallagher said. “I wouldn’t ever describe our affiliates as franchisees but what we’re trying to achieve.”